The Board of the Trust employs Janus Henderson to manage the portfolio. The Lead Manager, Alex Crooke, is responsible for the geographic asset allocation of the portfolio and how much of the fund is allocated to each underlying regional investment team. Each team is tasked with building a portfolio of between 20 and 30 stocks, with a focus on stocks that are highly cash generative and not overpriced. The result is a portfolio of around 180 companies that is well diversified by country and sector, and also at stock level.
The Trust has historically been managed with a value style, but Mr Crooke and his colleagues feel that the market has changed, and they have moved away from this approach to more of a core-growth strategy. This has resulted in a focus on companies that have high free cash-flow yields and these companies tend to be more expensively rated in valuation terms. However, valuation is still a key factor in their investment decisions and they will not buy quality at any price. Companies such as Microsoft, Estée Lauder and Visa are examples of how they are reflecting this change in the portfolio.
There has been a progressive trend in the portfolio of reducing exposure to the UK market, with the allocation falling from 40% to 26% over recent years. Mr Crooke intends to maintain this trend, which was initially driven by investors wanting the Trust to focus on overseas opportunities, but at present believes the UK market to be significantly undervalued and has delayed any further reduction.